Rapid rise of electronic cigarettes: Public health and policy implications

Background: While there have been many discussions of e-cigarettes in mass media, little is known about the diffusion and penetration of e-cigarettes in the U.S. and the factors that contributed to it.

Methods: Quarterly and market-level store scanner data from Nielsen were examined for the period 2010 - 2011. Types of stores in the analysis include food, drug, and mass stores, as well as convenience stores. Sales volume, average price, and major brands of e-cigarettes, as well as promotional expenditures, were analyzed.

Results: The sales volume of e-cigarettes increased from less than 10 million pieces in the first quarter of 2010 to more than 300 million pieces in the fourth quarter of 2011. The average price per piece dropped from $35 to $23 in the same period. The rise of e-cigarette sales in 2010 were entirely attributed to the increased sales in convenience stores. The increase in sales in the last two quarters of 2011, however, was driven primarily by sales in food, drug, and big box stores. The number of markets sold e-cigarettes increased from 11 markets to 41 markets in the two-year period. The number of e-cigarette brands with significant market shares also increased from a couple to more than a dozen during the same period.

Conclusions: E-cigarettes have experienced significant increases in 2010 – 2011. Falling prices, brand competition, market diffusion, and intense promotion, as well as the federal tobacco tax increase in 2009, seem to contribute to the rapid rise of e-cigarettes.